Re-wiring for the Complex Workplace

Complexity is the new normal

We are so interconnected today that many cannot imagine otherwise. Almost every person is connected to worldwide communication networks. News travels at the speed of a Tweet. Meanwhile, inside the enterprise, reaction times and feedback loops have to get faster to deal with markets that can create multi-billion dollar valuations seemingly overnight. But are they getting faster?

Expectations for digital competencies for workers keep increasing, without much of a clue from management what these really are. Today’s workplace demands emergent practices just to keep up, but there is little time or thought provided to develop these. In most cases our current models for managing people and supporting their knowledge-sharing are ineffective.

Inside Learning Technologies & Skills – May 2014

Knowledge workers today need to connect with others to co-solve problems but the best tools to do this are often outside the enterprise. For instance, social media can enable the development of emergent practices through ongoing conversations. Sharing tacit knowledge in this way is becoming an essential component of knowledge work. But too often the tools needed are not available, or internal policies cripple knowledge-sharing, especially if contract or external workers are involved. The modern enterprise is its own worst enemy.

In the network era, learning and working are tightly interconnected. Connected knowledge workers need more than directives; they need ongoing, real-time, constantly-changing, collaborative, support. This should be a major management responsibility but it is often ignored.

To create professional knowledge-sharing connections requires a level of trust that has to be developed over time. Trust cannot be turned on as desired, no matter what the company directives state. The default action is often to turn to the closest colleagues for advice, but they may not be the most knowledgeable on the subject. Company policies that try to limit information sharing, in case it may be inaccurate, further sabotage organizational learning. Social bonds keep us together and connections between people drive innovation. However, management can routinely ignore social learning because it is not visible. Our complicated industrial organizations are quite good at keeping their structural problems hidden.

The end of simplicity

Most companies started with relatively simple structures; a few people gathering together around an idea. For small companies, decision-making, task assignments and direct interaction with clients are rather straightforward. With growth, the simplicity ends. Organizational growth is usually viewed as a positive development, but it comes at a cost.

As organizations grow, the original simplicity gets harder to maintain. Some management experts consider the ideal size of an organization to be around 150 people. This is based on Robin Dunbar’s research and is supported by the consistent size of military units through history. Beyond this size, knowing everybody in person becomes impossible. Above 150 people, additional layers of power and delegation begin to develop and companies enter the realm of complication.

Complication

Most of today’s larger companies have a complicated structure. It takes a lot of analysis to understand all the pieces. Over time, even more processes and departments are put in place. To ensure reliable operations and mitigate risk, the core competencies of decision-making and innovation are centralized, creating a structural knowledge-sharing bottleneck. New layers of control and supervision continue to appear, and knowledge sharing is so formalized it becomes useless for decision-making.

Without two-way knowledge-sharing, workers get disconnected from the company. For example, the company’s vision will be established at the board level, but individual workers will be far removed from it. A company vision statement that says people are its greatest asset will not be respected by workers who fear the next down-sizing event designed to increase stock value.

As companies get even bigger, internal growth and innovation reach a tipping point, and companies rely on mergers and acquisitions to maintain the illusion of growth. By transferring jobs to subsidiaries, contractors and subcontractors, these large firms do not even create new jobs any more. The reliance on these workers creates more control protocols as management trusts them less than full-time employees, thus choking off meaningful knowledge-sharing. However, the acquisition and sharing of new knowledge remains a critical factor for innovation. To compensate for its complicated processes, the large enterprise may put significant effort into compliance training for workers, and leadership training for executives. The former is often useless and the latter can be a scam.

Today’s complicated organizations are now facing increasingly complex business environments that require agility in simultaneously learning and working. Typical strategies of optimizing existing business processes or cost reductions only marginally improve the organization’s effectiveness. Faster markets challenge the organization’s ability to react to customer demand. Decision-making becomes paralyzed by process-based operations and chains of command and control.

Re-wiring for complexity

Organizations need to understand complexity instead of adding more complication. This lack of understanding is a major barrier to becoming a truly connected enterprise in the network era. To succeed in complex environments, the organization should focus on four basic pillars:

Knowledge

Trust

Credibility

a Focus on Results

These are the principles of knowledge architect Jon Husband’s ‘wirearchy’ management framework.

First consider that innovation comes from a diversity of ideas and networks, but only if knowledge is freely shared. Trust emerges over time through transparency and authenticity, practiced by people narrating their work. Credibility is earned through collective intelligence, developed through an active questioning of all assumptions, including our own. Finally, a focus on results is enabled through both collaboration and cooperation, and is further enhanced by ‘subsidiarity’ – the promotion of the furthest possible distribution of all authority.

These four pillars can help address the real industrial disease: complication. The pillars are the foundation for management practices in the network era and are directly linked to managing open networks and practicing connected leadership. In the network era, everything is connected: leadership, management, learning, and getting work done.

A Road Map for the Transition

The first step is get everyone narrating their work. If work is not worth discussing, why bother doing it, especially as less of it is routine? Narration helps people understand each other better. Conversations make us human, which is why solitary confinement is such a severe punishment. Narrating work is also a powerful behaviour changer, as any long-time blogger can attest. It is empowering. In addition, having general conversations is one of the highest rated methods for learning at work, according to industry surveys conducted by social learning expert, Jane Hart.

Once people are narrating their work, they can start building their own personal learning systems, using sense-making frameworks like personal knowledge mastery. Critical thinking, or questioning all assumptions, including our own, is part of this. Asking employees to engage in real critical thinking, and accepting the resulting actions, will not work unless there is a distribution of power and authority because critical thinking is not just thinking more deeply but also asking difficult and discomfiting questions. Without power to act, these questions are meaningless, so distributing authority must happen concurrently.

The principle of subsidiarity, or the promotion of the furthest possible distribution of all authority, is a good guideline to begin with. One example I heard of was that if three people agreed to do something, then it was fine to do so. If this is coupled with the promotion of critical thinking and narrating your work, then the rest of the organization will know what is happening. Simple principles will keep the organization resilient to deal with change. Let people, not rules, be your risk mitigation strategy.

Finally, sharing the vision and articulating it will keep a connected enterprise on track for the long-run but still ready to adjust course as required. For example, the Netflix vision is clear – “we seek excellence”. As CEO Reed Hastings states, “in creative/inventive work, the best people are ten times better than the average, so there is a huge premium on creating effective teams of the best people”. Hastings says that companies can avoid chaos as they grow by hiring more high-performance people and not making more rules. This requires people with self-discipline as well as the ability to openly question actions inconsistent with the company’s values.

The emerging transparency from distributed authority, narrating your work, and active questioning will promote trust throughout the enterprise. Nothing will speed the flow of knowledge more than trust. These steps can be taken by any organization, at any time. Opportunities for learning and development professionals abound in the connected enterprise, but they are not the traditional roles that many people have built their industrial careers upon.

A deep consequence of the asynchronous-distributed paradigm is that control based on centralized authority will be unable to keep pace with change. To avoid stale decision-action authority needs to be distributed to the same level at which the sensing, anticipation, and response formulation (SAR) takes place. You are spot on about the importance of trust. Ideally, distributed governance will align with SAR. A really big challenge is to have correlation of goals across the hierarchy so that SAR aligns with the larger goals. [BTW this is what people seem to mean when they talk about ‘culture’.]

Harry, you had me at, “rewiring”. If we don’t change our whole attitude on how things are run, our society and economy will implode. I work at a university and things are as bad here as you suggest they are for corporations. I have no faith they are any better at any other institution. That may be because so many with PHd behind their names can not conceive of anyone knowing more about anything then they. These are scary times and I am starting to believe that change will not come fast enough.